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Decentralization and Municipal Support in Kosovo (DEMOS)

Since the declaration of independence in 2008, Kosovo has been engaged in the reform and decentralisation of its public authorities with the aim of strengthening autonomy and local democracy in its 38 municipalities. The SDC's “Decentralisation and Municipal Support” project (DEMOS) aims to help municipalities enhance democratic governance and municipal management and provide better public services, thereby supporting Kosovo in its transition to a democratic and decentralised state.

Despite good progress achieved, there are still major issues in building a strong local governance system in Kosovo. The weak democratic governance (i.e. low citizen participation) and sub-optimal management of municipal financial and human resources lead to insufficient municipal services. These services do not improve the lives of citizens noticeably, neither the satisfaction of citizens and trust in public institutions. The main causes for these weaknesses are inappropriate incentives. For example low salaries, inadequate performance appraisal and career development systems leading to lack of motivation of staff and consequently to low performance of civil service.

Objectives

DEMOS supports Kosovo in its transition process towards a democratic, decentralized state in which municipalities exercise inclusive governance and provide effective services responding to citizens’ priorities and needs.

Theory of change:The incentive, integrated into the Kosovo system, accompanied by technical assistance, will improve governance processes at the local level, which, together with the improved policy framework, will lead to provision of better services to citizens. The improved service delivery is expected to contribute to the satisfaction of citizens, who in turn will be more willing to pay taxes and further contribute to the financial autonomy of municipalities and an improved social contract with the citizens.

Target groups

DEMOS II will extend its coverage (from 17 in phase I) to all 38 municipalities (direct beneficiaries) of Kosovo, covering the entire population (indirect beneficiaries) of the country of over 1.7 million. Of 38 municipalities, 10 are Serb-majority populated, including four in the North of Kosovo, which are less integrated in the Kosovo systems compared to other municipalities.

The project will make Technical Assistance available to the executive and the legislative bodies of municipalities. The project will also work with the central government, namely with the Ministry of Local Government Administration (MLGA) and the Ministry of Finance (MoF). SDC’s core contribution to the AKM will be continued.

The policy framework is more conducive for decentralised local governance and better implemented at the central and local level

The Association of Kosovar Municipalities is effective in advocating on behalf of municipalities and in serving the needs of member municipalities, including continuous capacity building

Results

Expected results:

Municipalities are enabled to adequately inform and include citizens in decision-making processes and stimulated to provide opportunities for inclusion of marginalised groups

Municipalities are supported in addressing audit recommendations and encouraged to comply with Human Resource Management requirements

The government is provided with policy advice for decentralised local governance

PBGS is successfully implemented and further aligned with and implemented within the governmental system

Pro-active lobbying and advocacy of AKM on behalf of municipal interests

Results from previous phases:

The Performance Based Grant System I (PBGS) instilled a sense of performance among the partner municipalities, leading to improved municipal governance and service delivery in supported areas (the average annual performance score of partner municipalities increased in accordance with PBGS target: from 32% in 2013 to 38% in 2015)

DEMOS contributed to improved services for over 300'000 Kosovan citizens (50% women, 9.5% minorities). This equals 43% of partner municipalities’ population and 17.6% of Kosovan population

DEMOS supported central and local government entities in drafting and adopting 20 policies, laws, regulations and recommendations, contributing to a more conducive regulatory environment for local governance and decentralisation

From 2014 to 2017, the first phase of DEMOS led to significant progress in decentralisation: the amount of tax revenue collected locally increased, and more than 300,000 citizens in 17 municipalities benefited from improved municipal infrastructure. However, municipal services do not yet meet the expectations of citizens, particularly in the infrastructure sector, and trust in public institutions remains weak. Improving the management of human and financial resources and increasing citizen participation in decision-making are the main challenges.

A virtuous circle

The government of Kosovo is co-financing the second phase of the project with CHF 4.5 million (out of a total of CHF 17,650,000). It covers all 38 municipalities in the country and aims to:

Improve governance processes at the local level;

Provide better basic public services that will satisfy citizens;

Increase the incentive to pay taxes and thus contribute to the financial autonomy of the municipalities.

The SDC also supports the Association of Kosovo Municipalities (AKM), which defends the interests of municipalities with regard to central government. Today, the AKM is systematically consulted during the drafting of any new legislation concerning municipalities. The aim of this second phase is to increase the engagement of voters within the AKM so that it actively defends the interests of municipalities and strives to meet the needs of its members.

An innovative funding system

The second phase of this project is expected to reach the entire population of Kosovo. 1.8 million people will benefit directly from this programme with concrete improvements in their daily lives. A performance-based grant system (PBGS) has been developed for municipalities to support them in improving their services. To access funding, municipalities need to improve their financial management and democratic processes, such as citizen participation, and submit to an audit. They can also benefit from specific training and technical support. With these financial means at their disposal, municipalities can invest in security and mobility. For example, investing in pavements, bus stops, street lighting, refuse collection, the creation of public spaces (parks, playgrounds) and early years learning lead to improvements in life quality.

Beyond these tangible results, the programme aims to improve the democratic functioning of society (citizen consultations, municipal assemblies) and the management of human and financial resources (recruitment, internal audits, tenders, project management) in all of the 38 municipalities. The AKM will disseminate good practices and learning among its members.